FEDERAL BUDGET 2010: $660 million for skills to ease labour shortage

The Federal Government has set aside more than $660 million over the next four years for investment in skills and job creation, including 39,000 new training places for industries suffering skills shortages.

But there will be questions over whether the $660 million is enough, as treasurer Wayne Swan has also forecast full employment – and certain skills shortages – by mid-2012.

Other initiatives include support for over 22,000 new apprenticeship placements through the extension of the Apprentice Kickstart scheme, an offer to the States to provide training entitlements for Australians under 25 and courses for up to 140,000 Australians to improve literacy and numeracy skills.

Swan said Australian unemployment peaked at a lower-than-expected 5.8% last year, and noted the economy is now heading towards an unemployment rate of 4.75% in 2012, “around the level consistent with full employment”.

In order to help alleviate skills shortages, Swan said, funding must be provided for new training places and education initiatives for workers.

“Now, with some industry sectors and regions growing faster than others, labour demand will grow faster in some areas than others as our recovery gathers pace,” he said.

Critical Skills Investment Fund

The new Critical Skills Investment Fund will receive $200 million in funding over the next four years and provide up to 39,000 additional training places for industries suffering shortages.

“Demand in these areas has threatened to outstrip supply,” Swan said in a statement. “At the same time, youth unemployment remains high in many parts of Australia. This package will provide Australians with the skills needed to support a sustainable economy.”

The $200 million will be used to train job seekers and up-skill existing workers. The Government will partner with industry organisations to deliver the funding to training in businesses on a competitive basis, in combination with advice from an independent board and contributions from industry.

This CSIF will focus on mature-aged Australians and will place a special emphasis on jobs in the infrastructure, construction, renewable energy and resources sectors.

Extension of Apprentice Kickstart Program

The Government has set aside $80 million to extend the Apprentice Kickstart program. The scheme will continue for six months longer than planned and will provide another 22,500 new apprenticeship places for industries suffering skills shortages.

The scheme will now run until November 12, 2010, in partnership with SMEs which have less than 200 employees and are having difficulty taking on an apprentice.

Businesses will receive $3,350 in bonus payments, in addition to the existing $1,500 commencement bonus. This money will only be received if businesses engage and retain school leavers in traditional trade apprenticeships, the Government said.

Another $20 million will also be provided to move the apprenticeship program from a time-served model to a competency-based system. The Government said this would allow particularly quality apprentices to reduce the length of their apprenticeship.

A panel will be formed to advise the Government on the program, along with involvement from the National Centre for Vocational Education Research.

Upgrade for VET program

As part of the Government’s skills package, $243 million will be provided over the next four years for a National Entitlement to a Quality Training Place program.

This program is designed to help younger Australians who haven’t finished Year 12 or a Certificate II qualification.

The program works by providing the States with more funding as of 2011 from the National Partnership Productivity Places Program. Also, $53.6 million will be set aside for greater access to income contingent loans, known as the VET Fee-Help scheme.

States must guarantee access for Australians aged under 25 to an accredited training place in order to receive the funding.

Additionally, a Quality Skills Incentive will also be introduced, backed by $130 million from the Government, in order to lift the performance of VET colleges across the country.

Providers must negotiate performance targets before the system is implemented, with a “rigorous performance management framework” to be introduced soon afterwards. This will begin in the 2011-12 financial year.

Adult literacy training

A further $120 million will be spent over the next four years for training in adult language, literacy and numeracy programs, titled the Skills for Sustainable Growth program.

The investment is designed to help 140,000 Australians over the next four years. The Language, Literacy and Numeracy program is designed to help 70,000 workers by 2014.

Additionally, a further $15.7 million will be set aside to boost the existing Workplace English, Language and Literacy program which will receive funding for an addition 9,500 places over the next four years.

About $13.1 million will be provided for the establishment of 8,000 community-based “informal learning options”. Another $23.5 million into the National Foundation Skills Outreach and Leadership program will also be provided with a focus on helping trade apprentices where they require high literacy skills.